From self to wealth

This week, I watched a YouTube video titled ‘7 life lessons school didn’t teach you’. I was really interested in one idea discussed which is that of investing in improving your skills versus putting that same amount into the stock market because you are likely to get outsized returns from the former.

At the outset, I believe it is a very sensible idea to be investing a sizeable proportion of one's income in a diversified investment portfolio. You protect your wealth from being eroded by inflation, and you are compensated by taking on risk so that wealth grows over time, which can compound significantly over a long enough time horizon.

That being said, I like this idea of essentially viewing yourself as an investible asset class, particularly when thinking about the small sums that someone might drip-feed into an investment portfolio on a monthly basis and in the earlier stages of your life and career.

Investing in You, ltd.

In the video, an example is given about putting $100 into the stock market into a passive index tracker fund versus buying ten business books for $10 each. The latter can teach the skills that would allow you to earn many multiples of that through implementing the learnings into your own life, significantly increasing your earnings potential.

Many of us will have studied for professional qualifications whilst at work, where we see a tangible benefit to our careers. My guess is we’ve not thought about doing similar things outside of work, especially for skills which, at the outset, are unrelated to our primary job.

However, in today's society, where many of us have a ‘side hustle’ in a secondary industry, investing time and money into building a broader skill set could have outsized returns. This is likely to be particularly true if it is an area we are just starting in, where our knowledge and experience are very low.

For example, I have started this email newsletter and aim to grow it significantly, but I do not have experience in marketing. Investing in a social media marketing course could have significant benefits - given that my current level of experience is so low - in terms of subscriber numbers and the associated monetary rewards that would bring.

Implementation idea

When next thinking about how to allocate your capital to investments, think about yourself as an investible asset class. Are there skills that could boost your personal earning power?

Allocating time, resources, and effort towards personal growth, education, and skill development cultivates a lasting and versatile asset - knowledge and expertise. This investment offers a lifelong return. You become a resilient and adaptable asset by honing your abilities, expanding your network, and enhancing your personal brand.

We all want to be better versions of ourselves. Let’s invest in making that a reality.

Best, Alex Joshi.

On my bedside table:

• YouTube: 7 Life Lessons Schools Didn’t Teach You - Ali Abdaal (link)

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